Money and art is an inescapably present theme in today's world, where winning auction bids are sky-high and the dizzying value of artworks has jump-started a massive machine that includes, among other things, storage, insurance and transportation. There's a whole supportive structure of daily tasks and activities that churn this machine, yet their link to the ethereal phenomenon that is art – is barely discernible. Nevertheless, art and money is a contemporary chemistry formula which even those who want nothing more than to give their heart to a piece of art, must come into contact with.

There is a service on the web-page for Rigensis Bank that is, much like a the symbol for a chemical element on the periodic table, titled “Ab – Art banking”. Founded in Riga in 2011, the private bank built an art storage space last year, in the basement of its location on Tēatra iela. Art banking is a service package offered by banks that are cognizant of the investment value of artworks (in the popular press, these are often referred to as “beautiful investments”). Although this is not a completely new practice in the world at large, the upswing in art banking has started just recently.

Since high-level art banking in Latvia is still only in its infancy, Rigensis Bank brought on board assistants in helping it work out its services and policies. The main advisor is the London-based Dutchman, Harco van den Oever, who spent more than ten years working at Christie’s auction house – some of those years as Global Head of Impressionist and Modern Art Acquisitions. For the last two years, however, Oever has been directing his own private business in London, Overstone Associates, which provides consulting services on how to run a successful business that concerns itself with art.

Established more than two centuries ago, London's Christie’s – where Oever worked for the first decade of this century – is the world's leading auction house, boasting sales of over 5.9 million US dollars last year (slightly ahead of the number-two Sotheby's, which had 5.1 million in sales).

Meeting with Oever in Riga gave me the chance to query him on the dictates of the art market, such as what is it that makes up an artwork's price, to art banking services and his own role at Rigensis Bank. I also brought up Latvia's local art scene, which has yet to reach the status of a “market” as such, and what it has to gain from the bank. In closing, I couldn't resist asking what could be three steps that a Latvian artist must take to have his or her work appearing up for auction at Christie’s...

In the late 1980s you started working in capital market sales, but in 2001 you moved to the art business. What drew you to art?

I was an investment banker for about 12 years. I left investment banking to set up a business, which I then sold. The question for me then was to either go back into banking, or to do something completely different. I must mention that my mum is a painter, my grandfather was a collector, and my uncle is also a collector. I was sort of brought up in an art-rich environment. So I thought I also want to do something in art. I was already about 35 when I left banking. I wanted to find something for which I had a passion, rather than just working in industry.

I started through a friend of mine, who said: “I know, Harco, that you like art.” He worked at Christie’s at that time. “Why don’t you come and be an intern with us?” So I was probably the oldest intern ever at Christie’s, at age 35 (laughs). So, I joined the party unpaid, and I did photocopying. And I loved it! Because I had a very stressful career behind me. Entering an environment where I could be like a student again was really great. The other thing that was fantastic – what we had to do as interns – was tracking art prices. That's because there was no artnet at that time, in the early 2000s. What we did was the following: we had all of the auction catalogues, and my role as an intern was to cut out the pictures (with the image, description and price) with scissors, and then stick them onto a card and write down what price it had gone for at the auction. I did that for five months and learned so much – because when you're cutting, you look at the picture and form a real connection to it. And at the same time, you are writing down the price, so you get a really good feel for the market. I would cut several pictures by one artist – one work made 3000 £ , while another work by the same artist made 15,000 £. Why was that? In this way, you start to get a real sense of the art market.

It sounds better than going to art school…

Well, you won’t get the art history background this way, but at the same time, what was amazing at Christie’s – at least for me, coming from banking – was that every colleague was so passionate about what they were doing. I'll never forget one of my colleagues who still is in charge of the surrealist sales at Christie’s. Ha had such a passion for surrealist art. And he would take me to the warehouse, pull a chair aside for me and one for himself, and then he'd put a painting on an isle in front of us, and he would start talking about the picture. And talk for an hour. I will never forget that the first picture was by Max Ernst. Not easy art; difficult art. But getting to listen to an hour of explanation about this artist was wonderful. So I got completely hooked during my internship. After five months, they asked if I would like to work here on a paid basis. And I screamed “Yes!!!”, even though it was a rather small salary. That’s how I started. Because I had a business background, I was quickly involved in the business side of art. I started as a business manager in the Impressionist Department, in London. After a few years, I became a managing director at the Netherlands' branch; after that, I became the managing director for continental Europe. And after that, the global head of the Impressionist and Modern Art Department. But I was always very much on the business side of operations, and my job was to ensure that, as a an auction house, we would be successful in the business of art.

You worked at Christie’s for eleven years?

Yes, eleven wonderful years. But after eleven years, you think, OK, that’s a long time in one organization – the longest I've ever spent in one organization. And I missed, a little bit, the entrepreneurship and hand’s-on experience of working in a small environment – because Christie’s is a big, global organization. That’s why I left Christie’s about two years ago. I started Overstone Associates to offer art advisory services. We don't advise on what art to buy for yourself – instead, we provide information on how one can run an art advisory business, as well as how to run art as a business: art insurance, art transport, art storage – all of the real management parts of the art world. Because what happens is, a lot of high-net-worth and ultra-high-net-worth individuals are now starting to look at their own collections as an asset class. Since the values have increased so very much, it is no longer just about the pretty picture hanging on the wall. It must now be looked at as a really proper asset class.

There aren't many companies like Overstone Associates in London, are there?

No; it is very interesting that there are just a very few people who do what I do now. And I think the reason for that is that the art market is a very small market. Despite the fact that the value of the art out there is massive. If you look at Christie’s and Sotheby’s combined turnover – it’s going to be about 10-12 billion dollars. It is a big industry. But that’s only a small portion of the entire art market – one which has about a 100 billion dollar total turnover, perhaps. In this sense, it is a big industry. But when you look at the number of people working in it, it’s actually quite small. For example, in Christie’s we were about 2000 people; at Sotheby’s, also about 2000. So, that's 4000 people in the main auction houses – working in the main corporate side of the business. But half of them do not have anything to do with art: they are the people who work in facilities and such. So, what you are left with is actually a very small number of people who have the combination of skills that are necessary for dealing with art as a product, and who also have a business background. That combination is very rare. Consequently, there are also very few companies like Overstone Associates.

But there are more and more companies who are starting to do that. Rigensis Bank, in Riga, is a very good example of a company that has understood that. And it’s actually one of the first banks out there that has really seen that this can be a proper service that they can offer to their clients. So, it’s quite wonderful to be invited to work with them.

What are your responsibilities in working with Rigensis Bank?

I’ve worked together with Rigensis Bank to set up a real service to Rigensis’ clients, one which revolves around art and art services. I’ve got a lot of experience, including my eleven years at Christie’s; I’ve got a lot of contacts in the art market – be they dealers, insurance companies, transport companies, etc. So, that’s what I’m bringing to Rigensis Bank. And what is wonderful with Rigensis Bank is that even though they have never done this before, they have realized that they really have to do this in a professional manner. And that’s the point at which they brought me on board.

How local, or how international, will Rigensis Bank be?

I think it’s going to be very international. Because Latvia has a really strong platform for art. The field of Latvian art, and how the local art market will develop, is an interesting subject of conversation. You have several elements that are required to develop a market. You have local artists, but you also need a local infrastructure to enable those artists to develop and to get to the point where they start being recognized in the international market. By infrastructure I mean galleries, insurance, transport, storage, a connection to the international art market; so, there are a lot of mechanical pieces that you have to have in place in order to start an international art market here in Riga.

Is Rigensis Bank a part of this infrastructure that will help develop the local art market?

Well, eventually yes, in the sense that they are part of the infrastructure that has to be in place, but it is just one piece. Will they focus more on local artists? I don’t know. But it’s all about the pieces of infrastructure that make it possible for a local art market to function.

But art banking, as such, is nothing new.

There are a number of international banks that have been doing art banking for a long time. And so it’s not new, in itself. What is happening right now, is that more and more banks realize that this is a really good way to interact with their clients. And as clients are ever more seeing art as an asset class, they are asking their banks to help manage their art as an asset class. And that’s where Rigensis Bank comes in. And I’m happy to see that.

Generally, art banking deals with art as an investment, and it operates by offering strategies and so on. Is there any place left for the love, passion and emotions that people direct at art, and for impulsive purchases?

That’s a good question. The passion is critical. You cannot be effective in this market without passion. Because that’s what all of the stakeholders are impassioned about. I already told you about Christie’s and how amazing it was to see that everyone was impassioned about art. You cannot enter this business without it. That’s integral to the business of art. However, passion, in itself, is not enough to run a proper art business. And I think that what I’ve been working on is to combine this passion with a very strong business proposition, to make the whole thing a really strong business process. So, art, as an asset class, has to be run as a proper business. And you need to push that professionalism more and more into the market. Because some people out there are just working on passion, and they don’t necessarily have the professionalism required of an industry – one in which you’re talking about values. So, what Rigensis Bank brings to the table is passion, but also the professionalism – the combination of both.

What is the difference between collecting art with the help of a gallery dealer or art historian, as opposed to collecting with the help of an art banking advisor?

Those are three completely different approaches to the art market. The art historian will look at art in the context of the history of art. Part of the art historian's interest will be to see how well-rounded the collection is, what’s missing in it. The art dealer will obviously have a tendency to look at the artists that he or she is representing. The dealer will say – I’ve got five artists that I’m representing, and they are fantastic! And rightly so, because that’s why that dealer picked those artists – you don’t pick what you don’t believe in. So, this is looking at the art market from a very narrow angle.

The bank, on the other hand, is looking at the art market form a slightly less emotional standpoint. What we’re bringing are connections to the global art market. We have connections with the best dealers out there for very specific categories. So, if you were to come to me and say – I’m looking for a 1960s Picasso, I would be able to connect you with someone whom I know has connections in that particular market.

In effect, these are three very different angles to the art market.

But the fact of having strategies in art, as a business… Isn’t the art market quite unpredictable?

Yes, you could say that. It’s definitely an unpredictable business. It’s very difficult to see where a particular artist is going. But there are ways to look at it. For example, it depends on who the dealer is. The dealer that is representing the artist is a critical path to the future value of that particular artist. Now, I’m talking about contemporary dealers and the contemporary art market. And what happens there is that a dealer will have, let’s say, a pool of twenty artists. The dealer will support twenty artists in the production of their works of art. Out of these twenty artists, maybe only three or four are really going to work. But even the dealer doesn’t know what’s going to work. It’s the same with singers, or any creative business. What’s going to make the difference is the reach of that particular dealer. If you go with a very small local dealer on the corner of your street, the likelihood of you becoming an international artist through that dealer is slim. If you go and work with Larry Gagosian, or White Cube, or any one of these major dealers, the likelihood of success is greater. That's because of their contacts with collectors. So, that brings a sort of sense of predictability in the market – looking at who is backing each particular artist, because that will give the artist more of a platform on which to develop.

What you’re also seeing today – if we are talking about old-master pictures, impressionist art, contemporary art – what happens is that the tastes of the collector are moving. And not only tastes, but also the availability of quality artworks is shifting. When you look at the old-master picture market, what happens is – there are ever fewer really good-quality works entering the market. Why? Because the really good-quality works of art have disappeared into the museums. If a museum buys a really good quality Vermeer, then it’s likely that that specific work of art won’t enter the market for a very long time. Since there is a finite number of pictures that were painted, it means that over the years, the number of really good-quality pictures that come onto the market is getting smaller and smaller. That means that collectors who used to collect old-master pictures will then move on to the fields of impressionism and modernism. After a while, the same will happen to these fields, i.e., the number of available, really good-quality impressionist and surrealist pictures will be less and less in number – because they will have disappeared into museums. Consequently, you see a shift happening, one that will eventually lead to contemporary art. One of the reasons why there is such a strong contemporary art market is that there still are a lot of really good-quality artworks entering the market – because they are still being created.

What constitutes the price given for a work of art? How do you look at the value of an item, and how does that link to the quality of an art work? Is there a direct link?

If you look at the old-masters' pictures – the artists spent years on one picture. And they produced very little. In today’s market, that picture created 300 years ago, where the guy spent such a long time on it, might be valued at only a tenth of the price for what a contemporary artwork is going for. Is that right? Is that wrong? I don’t know. At the end of the day, what creates the market is supply and demand – the appreciation of a particular type of work, in that particular point of time.

If you talk about value in contemporary art, Yves Klein is one of the artist that comes to mind. In the performance piece, Zone de Sensibilité Picturale Immatérielle (Zones of Immaterial Pictorial Sensibility) 1959–62, he offered empty spaces in the city in exchange for gold. He wanted his buyers to experience The Void by selling them empty space. In his view, this experience could only be paid for in the purest material: gold. In exchange, he gave a certificate of ownership to the buyer – imagine the value of that certificate today. The second part of the piece, performed on the Seine with an art critic in attendance, was that – if the buyer agreed to set fire to the certificate, Klein would throw half of the gold into the river. He used the other half of the gold to create a series of gold-leafed works, which, along with a series of pink monochromes, began to augment his blue monochromes toward the end of his life. This event was crazy and incredible, and we are still talking about this, although it was 50 years ago.

So this is about the concept, rather then the actual object. The few certificates that have remained are worth fortunes today. So is that the value of art? Is it about the concept, rather than that one old-master picture that the guy spent a decade painting? I don’t know. But what is true is that it is all dictated by the collector. The collector dictates the value of art. That’s important. And during an auction, you really see that going on in live-action. Before an auction takes place, you have a pretty good sense of what price each particular piece will go for. But sometimes at auctions, even we – the professionals and specialists in the art market – are surprised. Because you have two collectors who are saying: “I want that! I don’t care how much I’m going to have to pay for it, but I want it.” And so the price goes through the roof! Is that OK? Sure, because that’s what those people were ready to pay for the artwork. So, that now is the value of that work of art.

That means coming back to the individual and the passion.

Yes, absolutely.

How do you view the relationship between the noncommercial aspects of the contemporary art world (activities like participating in biennales), and the art market – with all of its auctions, sales and art fairs?

From what I’ve seen in my experience – when an artist is exhibiting his/her work, from that moment on, it’s already commercial. It doesn’t matter where. The artist is exhibiting because she wants to have a particular audience. It’s very rare that audience attention is the only thing that they want. I’m not saying that artists are money-grabbing individuals. Not at all. But the moment you exhibit, the moment you go out, it becomes commercial. Because you are showing your work to people, some of whom will say – I want to have that. As soon as you have that, it becomes a commercial transaction – at whatever level – 15 EUR or 15 million euros. I don’t think there is a very strong line dividing the noncommercial aspect of art and the commercial, at least not in contemporary art.

But a lot of artists like to think that they’re noncommercial. Is that an old-fashioned illusion?

I don’t think it’s old-fashioned. Although it is very difficult in today's environment – unless you’ve got money from you parents or something like that. But the whole ethos of the starving artists – which is what was going on between the wars in Paris, where you had to starve in order to be really good – I think those days are over. Damien Hirst is not really a starving artist, but he still is making very good work.

What do you think of the Damien Hirst phenomenon? Some criticize his art now, but nevertheless, there still is great demand for his works.

He is part of this YBA movement, which became very popular. And he is one of the artists that has benefited the most. I think he does fantastic work. He had a retrospective at the Tate Modern two years ago, and the art is phenomenal. Is he still as creative as he used to be? I think so. I think he has developed and matured; the quality of his work is stunning. Are the works worth the money that people pay for them? Absolutely! There is only one Damien Hirst, and if you want really good-quality Damien Hirst, you are competing against a bunch of other people who want the same thing. That’s where the prices comes from. It’s about the appreciation of an artist, and how many people appreciate the work of that artist. How many people’s hearts does the artist touch. That’s ultimately what drives the price.

I once spoke to the Polish art critic Anda Rottenberg, and she compared today's mind-blowing art prices with those of the tulip market in the 17th and 18th centuries, in the Netherlands.

I don’t agree with this theory. I don’t think it’s comparable at all. There will always be speculation in a market that’s doing well. There’s no doubt about that. The tulip market was only speculation. Because they were flowers. It’s like a state of euphoria, but you just need to take one step outside of it, and the whole thing falls apart. This was, a little bit, the case in the art market of the late 1990s. Because the euphoria and the art price increases were very much driven by just one type of collector – the Japanese speculative collector. These guys were buying art and selling it to the warehouses, without even looking at the pictures, because it was just a speculative way to make money. That was a bubble, no doubt about it. But today, it is a fairly different environment. You have a creation of wealth that we haven’t seen in a very long time. A creation of wealth that is spread out across the globe: in China, in Russia, in India, in Brazil, in Africa. So you have a much wider spread of wealth – a larger number of people interested in buying art. When you look at the demographics, a lot of these people are buying art just because they really love it, they enjoy it, and they want to show their friends that they enjoy it. And so, I think it is a very different environment today than it was in the 1990s, and completely different from the tulip extravaganza of the 17th century.

In December of last year, Christie’s had it’s first auction in Mumbai, India. Does that mean that the art market is moving to India now?

I think that the Indian post-war and contemporary art market started doing well about seven to ten years ago. There is a local player, called Saffronart, which is an auction house. And setting up that auction house enabled the art market to increase its potential. The quality of art is the same as it was ten years ago, but the artists’ exposure has changed, and their potential has changed. It is a local auction house, and perhaps there was also a new wealth created in India, so that local Indians were able to actually start buying local art, start appreciating and supporting the local artists. And I think that here in Latvia, you have the same opportunity today – of being a platform for art banking in the Baltic States. That’s going to create wealth in Latvia, and that’s going to create collectors who will start supporting the local market, and thanks to the infrastructure here in Latvia, that will enable the support of, for example, exhibition spaces, insurance, etc. And then the same will happen as with the Indian artists, who now get paid much more for the same quality works of art that they were making a few years ago, but for which they were being paid much less back then.

Yes, that’s good for the artist...

Yes, and it’s good for art! I strongly support high-net-worth individuals buying art, because that supports the artists, ultimately. That means there’s going to be more art produced. When you look at the history of art, when art was really productive – it was at those times when a lot of money was being invested into art.

What is the future of buying art online?

There are several parts to that. The first part is that the online channel is here to stay. It’s a really important element. And this comes back to our conversation about infrastructure. The online channel is a building block of the international art market's infrastructure. It’s a medium with which to expose a much wider audience. But do I think that quality art is going to be sold solely online? I'm doubtful. You know, art is a visual, tactile business. It’s not a commodity.

A thought experiment! List a three-step-guide for a Latvian artist to follow in order to be sold at a Christie’s auction.

In order to have a good, functioning local art market, you need to have a good, functioning local infrastructure: you need good transport, good insurance, good banking, good dealers – all of those elements make a market grow and flourish. To develop further, it depends on how many contacts the dealer has. Otherwise, it will remain just a local market. At the same time, you need good local collectors who are there to support the local artists, so that they can develop. But it is always up to fortune, and it is not easy for an artist to acknowledge that there is no easy, three-step-guide to being represented by Larry Gagosian and to be sold at Christie’s. It doesn’t really work that way. You need to start with building the local market, and that then enables the local artist to actually achieve his or her potential.

You already mentioned your relationship with art at the beginning of our conversation. But do you collect art? And has your professional experience influenced your taste in choosing art?

I’m afraid it has changed my taste…

First of all, I’m no longer a banker, so obviously, my budget has become smaller then it was in the past. Unfortunately, my taste has evolved, so when I now look at the stuff that I bought when I was a banker, I think: Oh, my God… My taste has evolved tremendously. As I mentioned before, with the example of Max Ernst. I would never have dreamed of appreciating his art. But now I’m all about what that artist did. That makes it really difficult for me to buy art because, somehow, I feel that if I like it today, I probably won’t like it in three-years' time (laughs). But that’s the beauty of art. It would be so annoying if tastes didn't change. Where's the fun in that? For me, it certainly has been a journey of discovery, and finding out what I like and what I don’t like. I have a few things under my bed that I try to forget about. But that’s part of any education. When I was a student and chose wine, as long as it was red and had alcohol in it, it was fine for me! (Laughs) But over the years, you become more refined.

Today, I really like contemporary art. And there’s lots of really good art that is affordable. And that’s the fun part also – to collect with a limited budget. It really forces you to look harder. It’s easy to buy a Picasso, it’s easy to buy a Damien Hirst. But it’s harder when you’ve got a smaller budget, and then it becomes a hunt, which is fun.